UNITED STATES ENVIRONMENTAL PROTECTION AGENCY BEFORE THE ADMINISTRATOR IN THE MATTER OF ) ) WAYNE VAUGHN, SR., WAYNE ) DOCKET NO. CWA-9-2001-0002 VAUGHN, JR., AND ) CARRIAGE HOMES, ) ) RESPONDENTS ) ORDER GRANTING COMPLAINANT’S MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT ORDER GRANTING RESPONDENT CARRIAGE HOMES’ REQUEST TO ACCEPT PROPOSED ANSWER The Complaint in this administrative enforcement proceeding was filed on February 26, 2001, against Mr. Wayne Vaughn, Sr., Mr. Wayne Vaughn, Jr., and the corporate entity, Carriage Homes. On March 20, 2001, Respondents Vaughn, Sr. and Vaughn, Jr. filed Answers to the Complaint and requested a hearing in this matter. The undersigned issued a Prehearing Order on October 1, 2001, establishing the prehearing exchange schedule. Pursuant to that Order, Respondents Vaughn, Sr. and Vaughn, Jr. filed their prehearing exchange.1/ The hearing in this matter has not yet been scheduled. Complainant’s Motion for Leave to File First Amended Complaint On March 7, 2002, the United States Environmental Protection Agency (“Complainant” or “the EPA”) filed a Motion for Leave to File First Amended Complaint (“Motion for Leave to Amend”) and appended a proposed First Amended Complaint to its Motion.2/ In 1/ Respondents Vaughn, Sr. and Vaughn, Jr., as common parties with the same attorney, filed a joint prehearing exchange. 2/ Two additional motions are pending before me; Complainant’s (continued...) 2 this motion, Complainant seeks to add a new Clean Water Act (“CWA”) claim against Respondents and delete the decedent, Mr. Wayne Vaughn, Sr., from this administrative enforcement proceeding. Respondents filed an Opposition to Complainant’s Motion for Leave to File First Amended Complaint (“Respondents’ Opposition”) on March 27, 2002.3/ In this filing, Respondents oppose Complainant’s proposed CWA claim but do not oppose Complainant’s request to delete Mr. Vaughn, Sr. from the Complaint.4/ The proposed claim that Complainant seeks to add to the Complaint alleges that Respondents failed to respond to an information request issued to Respondents on October 22, 2001, pursuant to Section 308 of the Clean Water Act, 33 U.S.C. § 1318 (“Section 308 Request”). This Section 308 Request was sent to Respondents after the undersigned had issued the Prehearing Order. See Respondents’ Opposition Ex. B (“Requests for Information under Section 308(a) of the Clean Water Act,” October 22, 2001). Complainant contends that the Request was issued in response to information that Complainant learned after filing the Complaint, information which Complainant contends “is relevant to proper adjudication of the claims already raised in this proceeding.” Complainant’s Motion for Leave to Amend at 4. Complainant maintains that this proposed claim should be heard in this administrative enforcement proceeding “to promote agency economy and to vindicate these meritorious claims in the most efficient manner.” Complainant’s Motion for Leave to Amend at 2. As previously noted in the Prehearing Order, this proceeding is governed by the Consolidated Rules of Practice Governing the Administrative Assessment of Civil Penalties and the Revocation/Termination or Suspension of Permits (the "Rules of Practice"), 40 C.F.R. §§ 22.1-22.32. The procedural rule governing 2/ (...continued) Motion for Discovery, and Complainant’s Motion in Limine and for Order Concerning Attendance of Witnesses and Hearing Procedures, each of which is accompanied by opposition briefs. Disposition of these motions will be forthcoming. 3/ Counsel indicates that Respondents’ Opposition was filed on behalf of all three Respondents. 4/ All parties agree that Mr. Vaughn, Sr. should be deleted from this proceeding, and the undersigned sees no reason why this amendment should not be granted. Thus, the remainder of this Order will address the contested CWA claim without reference to the request to delete the decedent from this proceeding. 3 the amendment of a complaint is found at Section 22.14(c) of the Rules of Practice, 40 C.F.R. § 22.14(c). Section 22.14(c) provides: Amendment of the complaint. The complainant may amend the complaint once as a matter of right at any time before the answer is filed. Otherwise the complainant may amend the complaint only upon motion granted by the Presiding Officer. Respondent shall have 20 additional days from the date of service of the amended complaint to file its answer. The Rules of Practice do not, however, illuminate the circumstances when amendment of the complaint is or is not appropriate. Nevertheless, some parameters have been developed through various administrative decisions. Specifically, the Environmental Appeals Board (“EAB”) has offered guidance on the subject, informed by the Federal Rules of Civil Procedure (“FRCP”)5/ and judicial interpretation of the FRCP. See In re Asbestos Specialists, Inc. (“Asbestos Specialists”), 4 E.A.D. 819 (EAB 1993); see also In re Port of Oakland and Great Lakes Dredge and Dock Company (“Port of Oakland”), 4 E.A.D. 170 (EAB 1992). Rule 15(a) of the FRCP addresses the amendment of pleadings.6/ 5/ The FRCP are not binding on administrative agencies but many times these rules provide useful and instructive guidance in applying the Rules of Practice. See Oak Tree Farm Dairy, Inc. v. Block, 544 F. Supp. 1351, 1356 n.3 (E.D.N.Y. 1982); In re Wego Chemical & Mineral Corp., 4 E.A.D. 513, 524 n.10 (EAB 1993). 6/ FRCP 15(a) states: Amendments. A party may amend the party’s pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, the party may so amend it at any time within 20 days after it is served. Otherwise a party may amend the party’s pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires. A party shall plead in response to an amended pleading within the time remaining for response to the original pleading or within 10 days after service of the amended pleading, whichever period may be longer, unless the court otherwise orders. (continued...) 4 The United States Supreme Court has interpreted FRCP 15(a) to mean that there should be a strong liberality in allowing amendments to pleadings. See Foman v. Davis, 371 U.S. 178, 181-82 (1962). Leave to amend pleadings under Rule 15(a) should be given freely in the absence of any apparent or declared reason, such as undue delay, bad faith or dilatory motive on the movant’s part, repeated failure to cure deficiencies by previous amendment, undue prejudice, or futility of amendment. See Id. In similar fashion to Rule 15(a), Section 22.14(c) of the Rules of Practice provides that a complainant, after the answer is filed, may amend the complaint only upon motion granted by the Presiding Officer.7/ The EAB has held that a complainant should be given leave to freely amend a complaint in EPA proceedings, in accord with the liberal policy of FRCP 15(a), inasmuch as it promotes accurate decisions on the merits of each case. See Asbestos Specialists, supra, at 830; Port of Oakland, supra, at 205. In the instant matter, Complainant argues that the proposed amendment to the Complaint does not cause undue prejudice8/, was not introduced in bad faith or with dilatory motive, and would not be futile.9/ As to the undue prejudice factor, Complainant asserts 6/ (...continued) FED. R. CIV. P. 15(a). 7/ The term “Presiding Officer” refers to the Administrative Law Judge designated by the Chief Administrative Law Judge to serve as the Presiding Officer. 40 C.F.R. § 22.3(a). 8/ Undue prejudice has been interpreted to mean that there will be an “undue difficulty in defending a lawsuit because of a change of tactics or theories on the part of the other party.” Heslop v. UCB, Inc., 175 F. Supp. 2d 1310 (D. Kan. 2001) (citing Sithon Maritime Co. v. Holiday Mansion, 177 F.R.D. 504, 508 (D. Kan. 1998); LeaseAmerica Corp. v. Eckel, 710 F.2d 1470, 1474 (10th Cir. 1983)). 9/ Complainant characterizes the futility of amendment factor in terms of whether the proposed claim is “frivolous”. Courts have treated the futility of amendment factor to mean that the amendment would not withstand a motion to dismiss. See U.S. v. Keystone Sanitation Co., Inc., 903 F. Supp. 803, 814(M.D. Pa. 1995) (citing Coventry v. United States Steel Corp., 856 F.2d 514, 519 (3d Cir. (continued...) 5 that the addition of this allegation will not impair Respondents’ ability to prepare a defense because Respondents already have the necessary and relevant evidence regarding this issue. See Complainant’s Motion for Leave to Amend at 8-9 (citing Howey v. United States, 481 F.2d 1187, 1191 (9th Cir. 1973)). Rather, according to Complainant, defending this proposed allegation merely requires Respondents to demonstrate that they were not legally required to respond to the Section 308 Requests. Moreover, Complainant contends that the amendment would not be futile because Complainant had the authority to issue the Section 308 Request and Respondents made a conscious decision not to answer. Respondents oppose the amendment, arguing that not only will they suffer undue prejudice if Complainant’s Motion is granted but also that the amendment would be futile. Respondents vaguely characterize the potential for undue prejudice in terms of temporal delay and financial burdens. See Respondents’ Opposition at 5-6. Although delay and financial costs are relevant considerations of undue prejudice, Respondents cite no authority in support of their position. Generally, the type of vague financial burdens and delay associated with this proposed amendment are not sufficient reasons to support denial of leave to amend.10/ Thus, I do not find Respondents’ undue prejudice argument to be a persuasive justification to deny Complainant’s Motion.